Question

Some recent financial statements for Smolira Golf, Inc., follow.SMOLIRA GOLF, INC.Balance Sheets as of December 31, 2013 and 2014 2013 2014 2013 2014Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 2,761 $ 2,557 Accounts payable $ 2,228 $ 2,750 Accounts receivable 4,692 5,631 Notes payable 1,825 2,266 Inventory 12,778 13,632 Other 105 122 Total $ 20,231 $ 21,820 Total $ 4,158 $ 5,138Long-term debt $ 14,800 $ 17,560Owners’ equity Common stock and paid-in surplus $ 45,500 $ 45,500 Fixed assets Accumulated retained earnings 15,729 40,207 Net plant and equipment $ 59,956 $ 86,585 Total $ 61,229 $ 85,707 Total assets $ 80,187 $ 108,405 Total liabilities and owners’ equity $ 80,187 $ 108,405SMOLIRA GOLF, INC.2014 Income Statement Sales $ 190,370 Cost of goods sold 127,703 Depreciation 5,183 EBIT $ 57,484 Interest paid 1,280 Taxable income $ 56,204 Taxes 19,671 Net income $ 36,533 Dividends $ 12,055 Retained earnings 24,478Required:Find the following financial ratios for Smolira Golf (use year-end figures rather than average values where appropriate): (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16). Enter the profitability ratios as percents.)2013 2014 Short-term solvency ratios a. Current ratio times times b. Quick ratio times times c. Cash ratio times times Asset utilization ratios d. Total asset turnover times e. Inventory turnover times f. Receivables turnover times Long-term solvency ratios g. Total debt ratio times times h. Debt-equity ratio times times i. Equity multiplier times times j. Times interest earned ratio times k. Cash coverage ratio times Profitability ratios l. Profit margin % m. Return on assets % n. Return on equity %

Answer 1

Answer:

                           2014 2013

Short-term solvency ratios  

CURRENT RATIO  4,25   4,87  

QUICK RATIO  1,59   1,79  

CASH RATIO  0,50   0,66  

Asset utilization ratios    

ASSETS TURNOVER TIMES  1,76   -    

INVENTORY TURNOVER  9,67   -    

ACC REC. TURNOVER  36,88   -    

Long-term solvency ratios  

TOTAL DEBT-ASSETS RATIO 16,20% 18,46%

TOTAL DEBT-EQUITY RATIO 26,48% 30,96%

EQUITY  MULTIPLIER RATIO  1,26   1,31  

TIMES INTEREST EARNED RATIO  44,91   -    

CASH COVERAGE RATIO  0,50   0,66  

Profitability ratios  

PROFIT MARGIN 19,19%  -    

RETURN ON ASSETS 33,70%  -    

RETURN ON EQUITY 42,63%  -    

Explanation: